Friday, June 25, 2010

The unachievable budget?

Over the last few days the Institute of Fiscal Studies has predominated in the commentary on the implications of the budget for public services. This is understandable when an independent and well-respected think tank warns of "the longest, and deepest sustained, of cuts to public service spending since (at least) WW2". The IFS also suggests that higher education, home office, justice, transport and housing could see spending cut by one-third over this parliament.

Less media profile has been given to the Social Market Foundation who have suggested the scale of cuts are unachievable:

The tax measures announced today mean cutting over £60 billion from public spending over the next five years. With universal benefits protected, the NHS needlessly ring-fenced and the unaffordable triple lock on pensions, cuts elsewhere will be swingeing which would undo their efforts today to protect the least well off.

The state's creditors want the deficit closed and they don't much care how it's done, so long as the plan is viable. The danger for the Government is that the country simply won't swallow this level of cuts to public services - hair-shirts have never flown off the shelves. It's therefore likely that the Chancellor will be back with more taxes before long.

Friday, June 18, 2010

Today’s free school revolution?

There has been a lot of discussion about the academies bill (and a few postings on this blog!) which will potentially cut loose high-performing schools. There has been less attention (until today) given to the Conservative proposals for free schools - allowing parents, teachers, charities etc to set up independent state-funded schools.

While the free schools idea builds on provisions introduced by the Labour government for parent-sponsored academies, the new Coalition is planning to clear obstacles to such schools. In particular, they promise to make it easier to secure sites for new schools by allowing a wider range of sites, including residential and commercial property, to be used as schools without the need for ‘change of use’ consent and by creating a presumption in planning guidance in favour of setting up of new schools.

There is still a lot of scepticism about free schools and whether "parents really want to run schools".(Of course, in headteachers will play the leading role in running free schools albeit with accountability to parents.) Often the most sceptical are people who would normally be keen on co-operatives.

The examples of Swedish free schools and American Charter Schools show how free schools here offer an opportunity to transform education in this country - particularly if a pupil premium for disadvantaged children is given sufficient financial weight.

The government has published information on the Department for Education website and encouraged anyone interested to link up with the New Schools Network who already have hundreds of local groups interested in setting up their own schools.

Thursday, June 17, 2010

Revised Charity Commission guidance on finance, risk and black swans

Last week the Charity Commission published four updated sets of financial guidance for charities. The documents cover risk management; financial difficulties and insolvency; reserves and internal financial controls.

The Commission says that the guidance has been revised to reflect new developments and the challenging economic climate that charities now face.

The updates include guidance on controls over internet banking and safeguards against fraud and financial crime (Internal Financial Controls) and a checklist of key questions for trustees to establish their charity’s financial position (Financial Difficulties and Insolvency).

Interestingly the Commission is warning charities to beware black swans – i.e. the high-impact, hard-to-predict and rare events spotted in Nassim Nicholas Taleb’s book.

The Commission notes (Charities and Risk Management):

If an organisation is vulnerable to a risk that potentially might have an extremely high impact on its operations, it should be considered and evaluated regardless of how remote the likelihood of its happening appears to be. Charities need to find a balance and they will need to weigh the nature of the risk and its impact alongside its likelihood of occurrence. With limited resources, the risks and the benefits or rewards from the activity concerned will need to be considered. It is important to bear in mind that on rare occasions improbable events do occur with devastating effect, at other times probable events do not happen.

Of course, the trickiest aspect of black swans is knowing what they are. High-impact and low-probability risks are often off the radar. Nevertheless rigorous risk management helps: the organisation with contingency plans for staff absence arising from pandemic flu will be more resilient when coping with absences due to volcanic ash grounding Europe.

Wednesday, June 16, 2010

Cuts, EMAs and alumni

This week’s Public Finance has an interesting article about by Conor Ryan about the Coalition’s education policies.

I was disappointed to read that Education Maintenance Allowances face an uncertain future under the Coalition. These grants were introduced to widen participation at 16-18 as well as promote achievement through linking payment to attendance. (A nudge before behavioural change became a fashionable policy agenda.)

When the independent and respected Institute of Fiscal Studies tracked the effects of EMAs, they found improved participation and achievement in education for disadvantaged students. In the case of minority ethnic there were “strong and significant improvements”. (The pdf can be found here.)

As the Coalition is committed to social mobility, EMAs should be safe in their hands. But if EMAs are to be reduced or abolished, perhaps some colleges might be able to do something.

I have always wondered why sixth form colleges, at least, do not see alumni as an opportunity. Might some old girls and boys be interested in contributing something to ensure that others share in the opportunities that they enjoyed? Universities do it – why not sixth form colleges?

Wednesday, June 09, 2010

Academies and free schools: practical problems?

As over 1,000 schools have responded positively to Michael Gove’s suggestion that they might like to become academies, it is inevitable some thought and media attention is given to some of the problems and practicalities.

Yesterday’s Times carried an article about the “complex problems” involved including staffing, land use and administrative capacity. As there are over 200 existing academies I am sure that many of these problems are neither new or insurmountable although I am sure that some of the smaller academies will struggle to cope with independence.

The Times article was strangely silent on the biggest issue of practicality: time. Is it realistic that secondaries and primaries making a decision now will be up and running by the start of the autumn term? Michael Gove is clever man so I assume that he has thought that through.

The media focus on the morphing of existing schools into academies has overshadowed the policy agenda around new providers – “free schools”. Last week the Guardian carried an interesting article about the application of European Union procurement rules to contracts to manage free schools. (Michael Gove has spoken of for-profit businesses managing the day-to-day affairs of free schools for not-for-profit governing bodies. In Sweden many of the free schools are run by for-profits such as Kunskapsskolan who operate over 30 secondary schools.)